Staffing firm Allegis and the Human Capital Institute teamed up on a study on how corporate procurement and HR departments view the growing contingent workforce.
It's a broad based study looking at a number of issues related to the contingent workforce. But I most liked the chart below, which shows the reasons companies use contingent talent.
As is clear from the data, flexibility is one of the key reasons firms use contingent workers. They allow firms to quickly and easily staff up and down as needed. Contingent workers also don't add to fixed costs.
This last point - that traditional employees add to fixed costs - is a relatively new issue. It wasn't that long ago when employees were not considered fixed costs. This is no longer true.
Because business conditions shift a lot quicker than they used to, cost committments that last more than a year are now considered fixed costs (5 years used to the norm for fixed costs). And because it's gotten harder to fire or lay-off traditional employees - especially quickly - more firms are viewing employees as fixed costs.
This is an important shift because businesses large and small are increasingly focused on reducing their fixed costs. We call this the shift to a variable cost economy.
The trends driving the growing interest in contingent workers are accelerating, which is a key reason we're forecasting that roughly 40% of the U.S. private workforce will be contingent by 2020.
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